HMRC publishes guidance on how to compute profits for micro businesses under FRS 105

HMRC has published FRS 105 overview paper - tax implications

FRS 105 took over from the FRSSE for accounting periods beginning on or after 1 January 2016 as the new accounting regime for micro entities. These are defined as business which in any year do not exceed two or more of the following criteria: turnover of £625,000, balance sheet total £316,000 or 10 employees.

Although FRS 105 itself is intended for companies, qualifying partnerships and limited liability partnerships, HMRC will generally accept calculations of profit for unincorporated businesses prepared under FRS 105 if they meet the size criteria to apply FRS 105.

The HMRC guide is a useful summary of the how to prepare tax computations for FRS 105 accounts.

ICAEW Financial Reporting Faculty has produced a Frequent Asked Question on micro entity accounts They also published a guide on new GAAP which readers may find useful.